QUIZ 1 : TOPIC 8 [JOB ORDER COSTING]

A company is more likely to use a job order cost system if

• it manufactures a large volume of similar products

• its production is continuous

• it manufactures product with unique characteristics

• it uses a periodic inventory system

The flow of costs in job order costing :

• begins with work in process inventory and ends with finished goods inventory

• begins as soon as a sale occurs

• parallels the physical flow of materials as they are converted into finished goods

• is necessary to prepare the cost of goods manufactured schedule

Raw materials are assigned to a job when :

• the job is sold

• the materials are purchased

• the materials are received from the vendor

• the materials are issued by the materials storeroom

The source of information for assigning costs to job cost sheets are :

• invoices, time ticket and predetermined overhead rate

• materials requisition form, time tickets and the actual overhead costs

• materials requisition form, payroll register and the predetermined overhead rate

• materials requisition form, time tickets and the predetermined overhead rate

The formula for computing the predetermined overhead rate is an estimated manufacturing overhead costs divided by an estimated basis of activity, expressed as

• direct labour costs

• direct labour hour

• machine hours

• any of the above

At the end of accounting period, a company using job order costing calculate the costs of goods manufactured :

• from time tickets

• from the work in process inventory account

• by adding direct materials used, direct labour incurred and manufacturing overhead incurred

• from the cost of goods sold account

Manufacturing overhead is underapplied if :

• actual overhead is less than applied overhead

• actual overhead is greater than applied overhead

• the predetermined overhead rate equals the actual rate

• actual overhead equals applied overhead

In a job order costing system, what is the order that goods are transferred through the conversion process?

• Raw materials, work in process, finished goods

• Work in process, raw materials, finished goods

• Raw materials, direct labor, manufacturing overhead

• Raw materials, manufacturing overhead, direct labor

At which stage of the manufacturing process would direct labour costs be applied?

• Raw materials

• Work in Process

• Finished goods

• Costs of goods sold

Which one of the following is NOT a component of the job order costing system?

• direct materials

• direct labour

• manufacturing overhead

• advertising expenses